EU Science Hub

Regional economic analysis and modelling

Competitiveness and social cohesion, two key pillars for a sustainable and prosperous European Union (EU), are the focus of JRC's regional economic analysis and modelling. A large part of the EU budget is devoted to promote inclusive development and the economic impact assessment of such policies is of crucial importance for the policy makers. Macroeconomic variables such as GDP, employment, productivity, and the trade balance are all interrelated and it is important to understand how they react to the EU policies and to other external factors.

The main tool used by the European Commission for regional economic analysis and modelling is the RHOMOLO model which is particularly well-suited for analysing policies related to investments in human capital, transport infrastructure, and innovation. 

The RHOMOLO Model

A key responsibility of the Regional Economic Modelling team is the development, maintenance, and use of the RHOMOLO model, the spatial CGE model with a focus on EU regions and sectors developed by the JRC in cooperation with DG REGIO. This model is being used extensively for impact assessments of the European Structural and Investment Funds such as the ERDF and the ESF, and it is used together with the European Investment Bank (EIB) for the evaluation of the macroeconomic impact of the EIB group (here's the first study on it published in July 2018). Starting from 2018, the analyses carried out by the Regional Economic Modelling team are published in the JRC Working Papers series on Territorial Modelling.

A RHOMOLO web tool has been developed to allow users to use a simplified version of the model to better understand the economic impact of structural changes such as shocks to labour productivity, total factor productivity, and transport costs. 

More information: Rhomolo website
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